The Central Bank notes the announcement by KBC Ireland (KBCI) and Bank of Ireland (BOI) to enter into a non-binding Memorandum of Understanding related to BOI’s proposed purchase of aspects of KBCI’s operations in Ireland.
There are no changes to the services that either bank is providing today. The announced discussions will take a period of time to conclude and further information will be shared with customers as those talks progress.
The Central Bank’s focus is to serve the public interest by safeguarding monetary and financial stability and working to ensure that the financial system operates in the best interests of consumers and the wider economy.
While decisions related to the strategic direction and business model of regulated firms are for the boards of those firms, they are obliged to consider all of the relevant risks and required to ensure compliance with applicable regulatory requirements at all times.
Ed Sibley, Deputy Governor, Prudential Regulation at the Central Bank stated:
“First and foremost, customers do not need to take any action. There are no immediate changes to the services the banks are providing today, nor the regulatory protections in place for their customers.
“The Central Bank’s supervision of KBCI and BoI remains focused on ensuring that affected customers are protected and treated fairly and that the banks are operating safely and soundly.
“We do understand that there will be concerns that this transaction, if it goes ahead, will result in a further reduction in the level of competition in the Irish retail banking sector, and a reduction in choice for consumers.
“Competition issues are primarily a matter for the Competition and Consumer Protection Commission. However, competitive pressures can clearly have an effect on the functioning of the financial system and the achievement of the Central Bank’s aim for it to sustainably serve the needs of the people and businesses of Ireland.
“This aim and consideration of the current and future financial services needs of businesses, households and individuals are at the forefront of our approach to regulating and supervising banks and other financial services providers (from payment institutions to credit unions) and our wider engagement with all relevant stakeholders.”